Weekend Wars: Buffett vs. S&P
Warren Buffett has long ago become far more than the world's richest man or its greatest living investor. He's an institution and as such can get away with words and actions most of us mere mortals, cubicle drones and self professed intellectuals can only think but never say out loud.
One such example seems to be Buffett's latest claim that U.S. debt merits a "quadruple A" rating. Though I have disagreed with lots of things the Oracle of Omaha has said over the past few years, I must say I am fully on board with this one. If not all together in logic, then certainly in spirit.
Even though this past week's events have made many nervous and rightfully so, the status quo really has not changed much in the world. Yes, a U.S. debt downgrade is a symbolic victory for nouveau socialists and America haters. It has rightfully and righteously shined the inspectorial flashlight on Washington and its Left-Right coalition of leather chair loving incompetents breathing hard as they drag their feet to the next election's finish line. But it has not changed the power structure of world economics and has quite possibly swung the pendulum decidedly back in America's favor.
As I myself begin to age, I start to see that wisdom and smarts have little to do with one another. Mere intelligence or the ability to interpret data can't hold a handle to having seen it all before. Though Mr. Buffett does not spend his days explaining his positions in dissected detail, he does know a hell of a lot more than I or you do. As fun as it is to be the know-it-all scamp on the come up, it is also could to STFU and listen to someone who has seen it, been there and done it a hundred times before you were a twinkle in your daddy's eye.
For those who understand the tortured vanity of propping up the planet and being questioned for it, Buffett's rationale makes perfect sense. There won't be any revenge attacks against S&P for disgracing America's honor but I do believe the downgrade will eventually serve as the greatest catalyst in the recovery. Something that I, now for the first time, believe is on the horizon.
How about yourselves?
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Interesting. You're right of
Interesting. You're right of course, Buffet knows a hell of a lot more than I do. But a credit rating serves a purpose, and I don't think that any rating agency should be looking at any newly issued American debt and rating it AAA. I believe that day came and went a while ago. I'm with you in spirit. But at the end of the day we have $1.5T budget deficits, a slowly decaying dollar, an extensively loose monetary policy horizon, an affinity for military action across the globe, and a country that's become increasingly reliant on government and cheap money. Wait until the 30 year bull market in bonds "officially" ends, eventually this country will be paying $1T in interest alone one day, that's incredible. I hope the Oracle's right, as usual.
There is all the difference in the world between treating people equally and attempting to make them equal.
"If not all together in
"If not all together in logic, then certainly in spirit." Can you elaborate on this? Everything else you wrote I could nod in agreement with, but here you seem to be condoning the traditional mindless, team-oriented American optimism.
Also, MIdas, I just can't take it anymore - I mean this in the nicest, most constructive way possible: http://www.google.com/search?aq=f&sourceid=chrome&...
Although all evidence points
Although all evidence points to the contrary, Buffet may be trying to bolster confidence in the markets with his optimism, knowing that people will trust his position given his legendary reputation. Otherwise, when looking at America's situation objectively and given that Buffet doesn't substantiate his reasoning, the downgrade seems rational.
"I want what all men want, I just want it more." -Achilles
bortz911 wrote: "If not all
"If not all together in logic, then certainly in spirit." Can you elaborate on this? Everything else you wrote I could nod in agreement with, but here you seem to be condoning the traditional mindless, team-oriented American optimism.
Also, MIdas, I just can't take it anymore - I mean this in the nicest, most constructive way possible: http://www.google.com/search?aq=f&sourceid=chrome&ie=UTF-8&q=overuse+of+italics
Buffett doesn't get in depth about why he holds his opinion, he just issues it matter-of-factly. As a result, I can't agree with his rationale on an analytical level, since he's not analyzing or addressing any data. I do, however, agree with the underlying point that the USD is very secure and that current fear mongering is overblown and politicized. The meaning of "quadruple A" (as I interpret it) is "still better than anything else out there, and as a result, safe and sound".
The reality is that for a bevy of reasons there can (currently, and for a good while into the future) be no reserve currency other than the Dollar. Conversely, U.S. debt is still going to be a safe haven port for money flight from all over the globe. The reason that I engage in what you refer to American optimism is because I come into near daily contact with people from all over the globe from countries and economic spheres of interest which would be pretenders to the throne. Having seen how economic infrastructures look from the inside out in some of the places in question I have to laugh at all the America is dead talk.
If the Dollar goes down, so does the global economy and my hunch is that for a guy like Warren who lived through a Depression, a World War, multiple Recessions and Stagflationerica...repeated experience trumps any new take on age old realities.
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He is talking his book. He
He is talking his book. He loves to talk his book.
You expect the greatest American investor of all time to say otherwise?
Ok, let's say America isn't
Ok, let's say America isn't the best. What country can be better? Apples to apples comparison. None of this tiny country in Europe shit. China and the USA are the only two real global powers. The USSR used to be the third. When you look at everything objectively, the USA is still a better place to be than China.
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ANT wrote: Ok, let's say
Ok, let's say America isn't the best. What country can be better? Apples to apples comparison. None of this tiny country in Europe shit. China and the USA are the only two real global powers. The USSR used to be the third. When you look at everything objectively, the USA is still a better place to be than China.
This is the dumbest thing I have ever read on WSO.
leveredarb wrote: ANT
Ok, let's say America isn't the best. What country can be better? Apples to apples comparison. None of this tiny country in Europe shit. China and the USA are the only two real global powers. The USSR used to be the third. When you look at everything objectively, the USA is still a better place to be than China.
This is the dumbest thing I have ever read on WSO.
How? ANT is completely spot on.
Ok dumbshit. I'm waiting for
Ok dumbshit. I'm waiting for your wise analysis of the situation.
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ANT wrote: Ok, let's say
Ok, let's say America isn't the best. What country can be better? Apples to apples comparison. None of this tiny country in Europe shit. China and the USA are the only two real global powers. The USSR used to be the third. When you look at everything objectively, the USA is still a better place to be than China.
I trust US more than China, but I would never say that America is the best.
What I exactly want to say is: ANT no good.
Comparing the US to Sweden is
Comparing the US to Sweden is utter bullshit. Compare Sweden to Oregon or something. The united states is a global superpower. We are one of if not the most powerful agricultural nation in the world. We have the best universities and are the destination for the best of every nation. We also have super power problems.
On and apples to apples basis, the USA is still the best. Maybe not if you enjoy total state control, rampant pollution and religious persecution.
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bortz911 wrote: condoning the
condoning the traditional mindless, team-oriented American optimism.
Is there something more useful in times of crisis?
As for S&P, I see them as a bunch of fools who think they are "sticking it" to Obama and the downgrade just worsens the economic climate. I'm not sticking up for it....it's pretty bad, and I think that ultimately this just underscores how irrelevant the credit rating business stands to become. If S&P and others had done their jobs in the first place we wouldn't be in this mess, so I think the best thing they can do is shut up.
Seriously, the bottom line is that they assign a value to the possibility of default: are they SERIOUSLY standing by the point that the US has any remote possibility of defaulting on its debt in the forseeable future?
I'm not buying anything they're selling, and haven't for some time. This is a destructive effort based on a myopic understanding of the world. Long term, S&P's credibility will suffer because of this, and not the dollar's.
I just had my first UFO experience.
I called my wife fat while we were making dinner.
Flying saucers everywhere XD
wadtk wrote: leveredarb
Ok, let's say America isn't the best. What country can be better? Apples to apples comparison. None of this tiny country in Europe shit. China and the USA are the only two real global powers. The USSR used to be the third. When you look at everything objectively, the USA is still a better place to be than China.
This is the dumbest thing I have ever read on WSO.
How? ANT is completely spot on.
He probably said it was dumb because you said 'objectively' when the statement couldn't be more subjective. Who thinks it's a better place to be? Who's point of view are you looking at? the investors? the average citizen? I bet Mao Zedong would think otherwise. The debate here is about credibility, not whats a better place to be.
I'd seriously consider politics if I were you. You can go on sensational rants, love taking jabs at specific groups, firmly believe you are right and always know the right answer when you are usually wrong (at least in my opinion) and have a large following on WSO. You'd fit in right with the current congressman.
I am sure some people think
I am sure some people think Afghanistan is the shit. Objectively, when you consider size of a country, global power, opportunity, choice, freedom, security, etc I still think the USA wins.
Comparing a country the size of one of our states, with a GDP a state, to the entire nation is inappropriate and wrong.
When you make comparisons you need to put subjective thinking behind you. Sweden, Finland, Belgium are all great countries. They are not in the same league as the USA, China, Russia, etc. Maybe you can compare the European Union to the USA, which would be at least more fair than other comparisons. Even then the EU would be behind China when you look at economic growth and global power.
If you think any country in Europe is a safer bet that the USA you are smoking crack. Europe has an aging and calcified work force and a completely anti immigrant stance. When you have negative birth rates and an aging population you need young immigrants. This is why the US continues to flourish.
Europe has no military worth a shit which is perfectly fine right now. Just wait until commodities become more scarce, food becomes more scarce, what becomes more scarce. I'll tell you what, an aircraft carrier and the USMC is enough guarantee I need that the USA will have food.
Look at what China is doing. They realize how precious and dwindling natural resources are. They also don't want to bump heads with the USA. So they invest and get contracts in unsavory nations while at the same time building up their navy (aka force projection). While China and the USA are carving up the world, Europe demilitarizes and basically rapes their operational capabilities for the sake of 2 months of vacation and retiring at 55.
Credibility? The US has 3x the largest gold reserve of any nation. Plenty of fat to cut and a newfound willingness to cut. Unlike Europe, the USA is trying to move away from entitlements and nanny state behavior (thanks Tea Party) and can easily change course. Europe on the other hand has to bail out nation after nation or risk watching the Euro take a massive hit.
China is second to the US simply because it is totalitarian. Freedom is an absolute good. China has far far less freedom than the US does. It is also primarily a developing nation. The majority of Chinese are dirt poor and it will take a long time for that country to have a living standard even close to what the US has. Please tell me how straight up facts can be subjective.
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The market will signal who
The market will signal who still holds the top tier slot for economic bad-assery. Yields are down, treasury cds are down,show me a safer investment. S&P is gettin' they charlie sheen on. #winning!
I have to return some video tapes.
Midas Mulligan Magoo
I just had my first UFO experience.
I called my wife fat while we were making dinner.
Flying saucers everywhere XD
It was dumb because the most
leveredarb wrote: It was dumb
I just had my first UFO experience.
I called my wife fat while we were making dinner.
Flying saucers everywhere XD
You're right lev, Sweden is a
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You're right lev, Sweden is a
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UFOinsider wrote: Midas
Where I unload on Twits and take verbal S***s
leave the swedes out of this!